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Was recently reading in depth around this and found this somewhere- "Brazil is the only country that has so far proven that it can produce large amounts of ethanol for fuel in an economical and environmentally-sound way. But India has a very good climate for sugarcane, and does produce quite a bit of ethanol. I'm actually not sure why India hasn't made more progress on ethanol fuel. A few speculative reasons: Lack of mandatory blending requirements. Many countries require gasoline/petrol be blended with 5-15% ethanol to stretch fuel supplies and support domestic farmers. This is easily the largest use of ethanol for fuel worldwide. Insufficient infrastructure investment. Producing fuel ethanol requires a significant number of chemical plants be built relatively close to agricultural areas. That involves electricity, roads, educated workers, and so forth. Vehicles that don't like ethanol. Older engines (particularly two-stoke) can have seals and hoses that are attacked by ethanol, even at fairly low blending ratios. Using 85% or pure ethanol for fuel requires special engine components (such as "flex-fuel" vehicles) which are probably not common in India yet. Fuel subsidies. Fuel ethanol only makes sense if the price of fuel is lower than the price of an equivalent amount of sugar plus processing. Price controls on fuel (even if not petrol specifically) make ethanol less likely to be economical. Even in Brazil, high sugar prices or low fuel prices cause sugar to be diverted from fuel production back to food. Fuel has to be more valuable than sugar for a large enough fraction of the year that ethanol-production plants will be profitable to build. Heavily-regulated sugar market. India's sugar industry has historically been extremely tightly-regulated, and that tends to dampen innovation and non-food uses of sugar. The very recent reduction in sugar regulation may help promote ethanol production. I'm not an expert on the Indian fuel market, so this is all educated guesswork. I'd appreciate comments from Indians on the subject".